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NHS trusts earning hundreds of millions of pounds in private income – new study shows

NHS trusts earning hundreds of millions of pounds in private income – new study shows

Posted on 19 September 2023

Hospital trusts are relying more and more on private income to boost their finances, with one Trust making more than half their income from commercial activities, a new study has revealed.

NHS organisations are implementing strategies to make income from commercial activities

University of York academics looked at six high-profile NHS trusts as case studies and found them to be making between 12 and 53 per cent of their total income from commercial activities in 2021/22, including activity from treating private patients and running labs and pharmacies to establishing branches abroad.

The “top earner” from commercial income was Guy’s and St Thomas’ NHS Foundation Trust which made £441 million in 2021-22 (which equates to 16.7 per cent of its overall income).

Commercialisation

The Royal Marsden NHS Foundation Trust was generating the biggest proportion of income from commercial work – 53 per cent.

The findings are published in Public Money & Management.

The study was led by a team of experts from York and the University of Birmingham, concluding that there is a “clear direction towards commercialisation” which has been aided by legislation passed by the Coalition government in 2012.

Entrepreneurialism

Professor Neil Lunt, from the School for Business and Society at the University of York, said: “We have identified a shift in language to defend such income and explored how entrepreneurialism has been justified with a public service ethos. Although this was an atypical sample, there is a clear direction towards commercialisation through diversifying income sources.”

“While the majority of their funding will still come from public/state sources, NHS organisations are implementing entrepreneurial strategies which are seen as essential to underpin core NHS services.

“In turn, this will reorient the organisations and their staff with a potentially detrimental effect upon a public service logic. The tension between public service and commercial imperatives has long been apparent but the logic and consequence of them has become more acute recently. The likely intensification of this tension will reveal further the impact (intended or otherwise) of such strategies upon ‘core’ public services.”

Hospital’s income

To determine how much of hospital’s income comes from private, rather than public, the research team analysed publicly available documents from:

The Christie NHS Foundation Trust
Great Ormond Street Hospital (GOSH) for Children NHS Foundation Trust
Guy’s and St Thomas’ NHS Foundation Trust
Moorfields Eye Hospital (MEH) NHS Foundation Trust
The Royal Marsden NHS Foundation Trust
University Hospitals Birmingham NHS Foundation Trust

NHS patients

Professor Mark Exworthy, from the Health Services Management Centre at the University of Birmingham, said: “While hospitals claim they are carrying out commercial work to top-up the funding they need to treat their NHS patients, the demands placed upon them by commercial imperatives could instead shift their focus away from their NHS work.”